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Is the Relationship Between Remittances and Political Institutions Monotonic? Evidence from Developing Countries

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  • Kevin Williams

Abstract

Remittances have become one of the most important sources of household income in developing countries, empowering recipients to be more politically independent. Using a dynamic estimator and panel data for 84 developing countries over the 1982–2011 period, this paper investigates the effect that remittances have on political institutions. Controlling for country and time fixed effects and using an exogenous source of variation to instrument remittances, the baseline results show that remittances start having a positive effect on democratic institutions when remittances reach 22% of GDP. This evidence suggests that remittances can influence the relationship between recipients and political elites, providing incentives for recipient households to hold their political representatives more accountable.

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  • Kevin Williams, 2018. "Is the Relationship Between Remittances and Political Institutions Monotonic? Evidence from Developing Countries," South African Journal of Economics, Economic Society of South Africa, vol. 86(4), pages 449-467, December.
    • Handle: RePEc:bla:sajeco:v:86:y:2018:i:4:p:449-467
    DOI: 10.1111/saje.12199
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    Cited by:

    1. Konte, Maty & Ndubuisi, Gideon, 2019. "Remittances and Bribery in Africa," MERIT Working Papers 2019-043, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    2. Boburmirzo Ibrokhimov & Rashid Javed & Mazhar Mughal, 2023. "Migrants remittances and fertility in the Post-Soviet states," Post-Communist Economies, Taylor & Francis Journals, vol. 35(6), pages 574-596, August.

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